Garden State Feds Squeeze 3rd Guilty Plea In Norhern NJ Sale Leaseback Equity Stripping Scam

From the Office of the U.S. Attorney (Newark, New Jersey):

• A West Orange, N.J., man who owned and operated multiple foreclosure rescue companies admitted today to his role in a mortgage fraud scheme that defrauded numerous mortgage lenders of over $10 million, U.S. Attorney Paul J. Fishman announced.
• Ronald Harris Jr., 41, of Piscataway, N.J., pleaded guilty [...] to an Information charging him with one count each of conspiracy to commit wire fraud and conspiracy to commit money laundering.

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• According to documents filed in this case and statements made during Harris’ guilty plea proceeding:
• Harris owned and operated Harris Capital and Skyline Capital Group, both of which held themselves out as foreclosure rescue companies and operated out of offices in Newark and later, Maplewood, N.J. Harris admitted that he and other individuals, including Harris Capital employee Sterling Bruce, 37, of Newark, fraudulently promised to help homeowners avoid foreclosure, keep their homes, and repair their damaged credit by directing the homeowners to allow title to their homes to be put in the names of third party purchasers, or straw buyers, for approximately six month to one year.
• Harris told the homeowners that during that time period, he and others would help them obtain more favorable mortgages and improve their credit ratings. The homeowners were told that the titles to their homes would be returned to them.
• After the homeowners were signed up, Harris, Bruce and others recruited individuals with good credit scores to act as straw buyers of the distressed properties. The straw buyers were told that they were helping someone save his or her home and that they would make money when they sold the property back to the current owner after approximately one year.
• Once the distressed homeowners and straw buyers were in place, Harris, Bruce, Pia Perkinson, 39, of Parlin, N.J. – a mortgage loan officer at a number of different mortgage loan companies – and others caused loan applications to be sent in the straw buyers’ names to mortgage lenders. To increase the credit-worthiness of the straw buyers and to ensure that they would be approved for the loans, Harris, Bruce, Perkinson, and others submitted loan applications containing material false personal and financial information about the straw buyers, such as misstating their employment, income, and assets.

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• Prior to the closings of these fraudulent transactions, Harris and Bruce regularly filed fraudulent liens for tens of thousands of dollars on the properties. At the closings of the transactions, the liens would be paid off with the proceeds of the fraudulently obtained loans and Harris and Bruce would enrich themselves. Harris admitted that he regularly laundered these loan proceeds through various bank accounts he controlled.
• In total, Harris and his co-conspirators caused lenders to fund dozens of fraudulent loans that totaled more than $10 million. Of that amount, Harris received approximately $1,145,993.(1)

For the U.S. Attorney press release, see Owner of New Jersey-based mortgage foreclosure rescue companies pleads guilty to $10 million mortgage fraud.

For the formal charges filed in this case, see USA v. Harris.

(1) According to the press release:

• Sterling Bruce previously pleaded guilty to one count of wire fraud conspiracy relating to his role in the mortgage foreclosure rescue scheme, and is currently scheduled to be sentenced on September 12, 2011;
• Pia Perkinson also previously pleaded guilty to one count of wire fraud conspiracy; a sentencing date has not yet been determined;
• Sabir Muhammad, 47, of South Plainfield, N.J., was charged along with Harris in the initial Complaint, and the charges against him remain pending.